This morning the company announced slotMusic, a compact memory card-based music format that can be played on cellphones, PCs and some MP3 players. It relies on MP3s without digital rights management schemes and is backed by Universal Music Group, Sony BMG Music Entertainment, Warner Music Group and EMI Group, all of which apparently believe that more physical media is the best way to reinvent their business model in the era of digital distribution. Though as SanDisk VP Daniel Schreiber notes, they do have their reasons. “There’s a billion phones out there and a lot of them can play music and a lot of them have a microSD slot,” he explained. “We think there’s still a need for a tangible, physical product. People will appreciate walking out of the store playing music on their phones.”

Perhaps. But will they appreciate carrying that music around on a 0.6″ x 0.4″ medium that’s about the size of a fingernail? Seems easy to lose, doesn’t it (maybe Case Logic is planning a slotMusic binder)? And wouldn’t they rather carry around hundreds of songs, instead of the dozen or so stored on each slotMusic card? And what if the memory card in their phone is already in use, filled up with contacts, applications and other data? What then? And beyond this, haven’t iTunes and Amazon MP3 made consumers more accustomed to purchasing music à la carte? Why purchase a full album at $15, when all you really want are the only two good songs on it?

This morning PluggedIn Media launched a new service for streaming HD-quality music videos. Backed by Overbrook Entertainment–Will “Gettin’ Jiggy Wit It” Smith’s production and management company–PluggedIn will offer some 10,000 videos from EMI (EMI.L), Vivendi (VIV.PA) and Sony BMG (SNE), along with the standard music-site fare–artist bios, users playlists and whatnot. That being the case, how does PluggedIn hope to differentiate itself from the competition? “We look at all the changes shaping online entertainment and see massive opportunity for lots of companies to appreciate and forge really viable consumer connections,” said CEO Jeff Somers. “We think what will separate us from what is out there today is an unbelievable high-quality viewing experience, matched with in-depth content and community tools.”

Perhaps. But it will also create dangerous rivalries with some powerful competitors. With its social-networking features, PluggedIn will soon find itself in direct competition with MySpace Music (NWS) as well as Hulu (GE).

In an interview with The Wall Street Journal, Apple CEO Steve Jobs said the company is reducing the price of DRM-free iTunes Plus tracks to 99 cents across the board, down from $1.29 per track. “It’s been very popular with our customers, and we’re making it even more affordable,” said Jobs, who first called for a DRM-free music marketplace in February in his “Thoughts on Music” essay.

Of course what Jobs really means is more affordable to fans of EMI artists. Because, as of this writing, EMI Group is the only major recording company with which Apple has cut a deal for DRM-free music.

Recently freed of its contractual obligation to major label EMI Group, top-selling British rock band Radiohead is releasing its seventh studio album, “In Rainbows,” on Oct. 10 as a digital download (presumably in delicious 320kbps, DRM-free MP3 format)–and it is letting its fans decide how much, if anything, to pay for it. “It’s up to you,” a message on the preorder site for the album reads. Click through to the pricing screen and a subsequent message adds: “No really. It’s up to you.”

And it is. Fans are free to pay whatever they’d like–as little as one penny (US two cents), plus a 45 pence (US 92 cents) charge for using a credit or debit card. “I like the people at our record company, but the time is at hand when you have to ask why anyone needs one,” said Radiohead singer Thom Yorke. “And, yes, it probably would give us some perverse pleasure to say ‘F— you’ to this decaying business model.”

Question is, given a clear, legal alternative to downloading music for free, will fans choose to support its creators? Just in case they don’t, “In Rainbows” will also be sold as a “discbox,” which will feature the new album on CD and double-vinyl, as well as a second disc with seven additional songs, photos, artwork and lyrics. The materials will be packaged in a custom hardback book and slipcase and sold at a price wisely left up to the band: £40 (US $81.18).

And with that, Radiohead sidesteps the traditional music industry altogether. “This feels like yet another death knell,” an A&R executive at a major European label told Time magazine. “If the best band in the world doesn’t want a part of us, I’m not sure what’s left for this business.”